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Technology Stocks : Disk Drive Sector Discussion Forum -- Ignore unavailable to you. Want to Upgrade?

To: Robert Douglas who wrote (5758)	3/2/1999 1:28:00 PM
From: Mark Madden	Respond to of 9256

I see your point but I think we all search for undervalued companies and hope they become fairly valued after we buy them. If they become overvalued, that's O.K. too. Then we may wish to sell them and put our money into another undervalued company.

To: Robert Douglas who wrote (5758)	3/2/1999 1:41:00 PM
From: Sam	Read Replies (1) \| Respond to of 9256

But it isn't just that DDs are out of favor. It is that the tape business and the drive business are, or have been, fundamentally different. The former has longer cycles and higher margins. Judging from the how the competition has stumbled over the past few years, it would appear that barriers to entry are higher than in the drive business, you can't conceive of, e.g., a former exec of EXBT or DLT saying in October that he will set up shop to sell tape backup drives and be ready for volume production in April using all third party materials, and have people take him seriously, as you have seen in drives. But the tape business, now close to 30% of QNTM's revenues and virtually all of its profit, gets buried in the valuation of the DD business, not the other way around. Maybe one day the opposite would occur, that the low margin DD business would get a higher PE because of the presence of the tape business. I don't know. Undoubtedly that happens at some companies (perhaps GE is an example?). But this way, at least it is cleaner, you have a choice about which one you invest in, and it should, IMO, be good for the stock price over the next year, assuming, of course, that the transition to SDLT goes well, and that SDLT dominates its sector in the same way that DLT has.

To: Robert Douglas who wrote (5758)	3/2/1999 3:29:00 PM
From: LK2	Read Replies (1) \| Respond to of 9256

Robert, on Wall Street, the idea is to make money. A rising stock price benefits both a company and its insiders (the company has more "wealth", and the insiders are better paid, whether in salary, bonuses, options, whatever. So whether or not it makes sense in the long term to take on debt, or have a stock split, issue tracking stock, or split a company into separate parts, it can make sense in the short term. Somebody often makes money on these moves. Maybe you consider money as separate from economic value. But the name of the game is money (maybe power, and a few other things, as well.) Do you want to put service to others at the top of the list? I realize that many of these companies advertise that their business is service to others. I think that even Microsoft is in business to help you do more and be able to use your computer better/more easily. I don't think that Microsoft says they are in business to make money. I don't think Disney says it's in business to make money. They are here to provide a better life for everyone, or whatever slogan their PR people came up with. Regards, Larry the Simplistic